Starbucks China Largest Rival Luckin Coffee Interested in Cosmetics
- Chaileedo Press
- May 25, 2022
- 3 min read
Luckin Coffee's business scope was involved in cosmetics wholesale and cosmetics retail. This is a signal that may show the interest of Luckin Coffee in the cosmetics market. In fact, Starbucks has launched cross-border cosmetic collection with Korean makeup brands.
Luckin Coffee, a new retail professional coffee operator in mainland China, established Luckin Enterprise Development (Shanghai) Co., Ltd. with a registered capital of 10 million yuan(nearly $1.5 million). Its business scope includes cosmetics wholesale and cosmetics retail. Shareholder information shows that the company is wholly-owned by Luckin Coffee (China) Co., Ltd.
However, this is not the first time that Luckin Coffee has shown interest in cosmetics-related businesses. As early as January this year, Luckin Coffee (China) Co., Ltd. had a business change, adding cosmetics retail, personal hygiene products sales and daily necessities sales to its general business items.
This signal shows the interest of Luckin Coffee in the cosmetics market.
In fact, it is not uncommon for tea brands to cross over to beauty. In Halloween in 2020, Starbucks and Korean makeup brand VIDIVICI launched a cross-border co-branded makeup collection, with black cats and pumpkin shapes as packaging elements and Starbucks logo elements printed inside. In 2021, Starbucks teamed up with local Korean makeup brand Stonebrick to launch a limited makeup single product --Lipstick (cherry blossom pink and coral bean paste) and eyeshadow (gray dumpling) are only available as "giveaways" for the Spring Coffee collection.
Previously, the trendy cultural entertainment brand PopMart subsidiary also underwent industrial and commercial changes, the company's business scope added publications retail, cosmetics retail, clothing and apparel retail, shoes and hats retail, etc. This is not the first time that PopMart has made moves in the beauty sector. In 2021, PopMart announced the establishment of Anhui PopMart Trading Co., which was involved in cosmetic retail.
In terms of co-branding, at the beginning of last year, PopMart joined hands with Little Ondine to launch the New Year's co-branded gift box. In March, the co-branded series "Innisfree Orange Light" was launched in collaboration with Korean cosmetic brand Innisfree. In May, it cooperated with the trendy girl makeup brand Judydoll to launch the Biqi Elf Flight series of makeup products. In addition, there is no shortage of L'Oreal, YSL and other well-known beauty brands and PopMart co-branded launch customized product gift boxes.
Not only that, in 2021, Chinese tea beverage brands such as A Little, NAYUKI, Cha Yan Yue Se and others have changed the company's business scope, adding cosmetics retail business. Among them, Cha Yan Yue Se has even established 17 new companies involved in the cosmetics business in the time of three months.
In addition to tea brands, luxury brand Valentino launched 2021 high-fashion beauty brand Valentino Beauty, the first series that includes full-line products foundation, lipstick, eye makeup, perfume and others. The brand also quickly laid out the Chinese market after its launch by launching its Tmall flagship store in July, opening a Chinese flagship store in September and landing in Sanya International Duty Free City in November.
Luxury brand Hermès, which launched its lipstick products last year, is also bringing its lip makeup line to the mainland Chinese market in July 2021. Meanwhile, Hermès' second makeup collection "Rose Hermès", launched in April, also includes a shade "Rose Poivré" designed for Asian consumers. This year, Hermès launched Rose Hermès new series, including lipstick, blush and other products. At present, a series of new products have been released in mainland China Hermès stores, selected sales stores and online official channels.
According to data from the National Bureau of Statistics, the total annual retail sales of cosmetics in China in 2021 was RMB 402.6 billion(about $60.39 billion), up 14.0% year-on-year, the largest increase in the past nine years. At the same time, compared with the United States, Japan, South Korea and other developed countries, China's cosmetics industry per capita consumption is low and relevant data show that in 2020, China's cosmetics industry per capita consumption is only 54 yuan($8.1), while the United States is 275.1 yuan($41.3), Japan is 280.8 yuan(about $42.1), South Korea is 243 yuan(about $36.45).
This shows that China's cosmetics industry has huge growth potential and is a sunrise industry. Therefore, other industry brands are naturally optimistic about this sector.
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